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Telephone & Data Systems (TDS)
NYSE:TDS
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Telephone & Data Systems
(NYSE:TDS)65Neutral
Telephone & Data Systems (TDS) vs. S&P 500 (SPY)
Market Cap
$3.73B
Dividend Yield0.89%
Average Volume (3M)882.34K
Price to Earnings (P/E)―
Beta (1Y)0.70
Revenue Growth-3.80%
EPS Growth83.27%
CountryUS
Employees8,800
SectorCommunication Services
Sector Strength85
IndustryTelecommunications
Share Statistics
EPS (TTM)-0.84
Shares Outstanding107,000,000
10 Day Avg. Volume1,092,367
30 Day Avg. Volume882,336
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.80
Price to Cash Flow (P/CF)4.70
P/FCF Ratio6.90
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$53.50Price Target Upside54.45% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
Telephone & Data Systems Business Overview & Revenue Model
Company DescriptionTelephone and Data Systems, Inc. (TDS) is a telecommunications company that provides wireless, broadband, video, and voice services to customers across the United States. The company operates through its primary business segments: U.S. Cellular, which offers wireless services and products, and TDS Telecom, which provides wireline and cable services. Established in 1969, TDS is headquartered in Chicago, Illinois, and focuses on delivering high-quality communications experiences to both urban and rural communities.
How the Company Makes MoneyTelephone and Data Systems generates revenue primarily through its two main business segments, U.S. Cellular and TDS Telecom. U.S. Cellular, a subsidiary of TDS, earns money by providing wireless services, selling devices, and offering equipment installment plans to consumers and businesses. This includes revenue from voice, messaging, data, and other wireless services as well as handset and accessory sales. Meanwhile, TDS Telecom generates income through its wireline and cable services by offering broadband internet, video, and voice services to residential and commercial customers. The company leverages strategic partnerships with content providers and equipment manufacturers to enhance its service offerings. TDS also benefits from recurring revenue streams due to its subscription-based model, which ensures a stable cash flow from its extensive customer base.
Telephone & Data Systems Financial Statement Overview
Summary
The financial performance is mixed. Declining revenues and profitability negatively impact the income statement. Meanwhile, the balance sheet shows resilience with stable equity, but increasing debt levels are concerning. Strong cash flow generation is a positive aspect, though sustaining positive free cash flow while improving net income is crucial.Income Statement
The company shows a declining revenue trend over the past years, with a noticeable decrease in the latest year. Net profit margins are negative, indicating losses, while EBIT and EBITDA margins have also suffered. The gross profit margin remains relatively strong, but overall profitability is under pressure due to high expenses or cost structure challenges.52
Neutral
Balance Sheet
The company maintains a stable equity base with a reasonable debt-to-equity ratio. However, the increase in total debt over the years poses a risk. Stockholders' equity has been relatively stable, supporting the company's financial health, but the decline in total assets could be concerning. Return on equity is currently negative due to net losses.65
Positive
Cash Flow
The operating cash flow remains strong, indicating solid cash generation abilities. Free cash flow has improved significantly from prior negative values, reflecting better capital management. However, the free cash flow to net income ratio is skewed due to negative net income, and the company's ability to sustain this trend is crucial for future stability.70
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 4.96B | 5.16B | 5.41B | 5.33B | 5.22B | Gross Profit |
| 4.96B | 2.83B | 2.85B | 2.86B | 2.87B | EBIT |
| 63.00M | -414.00M | 328.00M | 477.00M | 476.00M | EBITDA |
| 1.20B | 682.00M | 1.08B | 1.18B | 1.19B | Net Income Common Stockholders |
| -28.00M | -500.00M | 62.00M | 156.00M | 226.00M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 0.00 | 236.00M | 360.00M | 367.00M | 1.43B | Total Assets |
| 13.68B | 13.92B | 14.55B | 13.49B | 12.53B | Total Debt |
| 1.05B | 5.14B | 4.80B | 4.04B | 4.50B | Net Debt |
| 1.05B | 4.91B | 4.44B | 3.67B | 3.07B | Total Liabilities |
| 7.80B | 7.91B | 7.93B | 6.75B | 6.92B | Stockholders Equity |
| 5.09B | 5.20B | 5.85B | 5.93B | 4.80B |
| Cash Flow | Free Cash Flow | |||
| 261.00M | -199.00M | -620.00M | -48.00M | 164.00M | Operating Cash Flow |
| 1.15B | 1.14B | 1.16B | 1.10B | 1.53B | Investing Cash Flow |
| -754.00M | -1.33B | -1.78B | -2.46B | -1.51B | Financing Cash Flow |
| -277.00M | 56.00M | 613.00M | 321.00M | 957.00M |
Telephone & Data Systems Technical Analysis
Neutral
34.64
Price Trends
35.72
Negative
33.29
Positive
27.30
Positive
Market Momentum
-0.31
Positive
39.18
Neutral
10.30
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TDS, the sentiment is Neutral. The current price of 34.64 is below the 20-day moving average (MA) of 37.10, below the 50-day MA of 35.72, and above the 200-day MA of 27.30, indicating a neutral trend. The MACD of -0.31 indicates Positive momentum. The RSI at 39.18 is Neutral, neither overbought nor oversold. The STOCH value of 10.30 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TDS.
Telephone & Data Systems Risk Analysis
Telephone & Data Systems disclosed 28 risk factors in its most recent earnings report. Telephone & Data Systems reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Telephone & Data Systems Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $187.92B | 17.55 | 10.54% | 4.24% | -0.08% | -24.48% | |
73 Outperform | $180.34B | 10.33 | 18.27% | 6.27% | 0.61% | 50.39% | |
65 Neutral | $3.73B | ― | -0.54% | 0.89% | -3.80% | 83.27% | |
65 Neutral | $5.48B | ― | -0.85% | ― | -3.48% | -169.60% | |
59 Neutral | $30.54B | 0.25 | -13.23% | 4.04% | 2.36% | -49.53% | |
48 Neutral | $5.23B | ― | -12.49% | ― | -9.95% | 99.47% |
* Communication Services Sector Average
Performance Comparison
TDS
Telephone & Data Systems
34.64
19.37
126.85%
T
AT&T
26.73
10.62
65.92%
LUMN
Lumen Technologies
5.03
3.30
190.75%
USM
United States Cellular
64.53
29.70
85.27%
VZ
Verizon
44.23
7.20
19.44%
Telephone & Data Systems Earnings Call Summary
Earnings Call Date: Feb 21, 2025 | % Change Since: -12.61% | Next Earnings Date: May 1, 2025
Earnings Call Sentiment Positive
The earnings call highlighted significant strategic transactions and investments that position the company for future growth, along with disciplined financial management resulting in increased free cash flow and reduced debt. However, challenges such as declines in service revenues, negative net retail subscriber adds, and pressure on adjusted EBITDA indicate areas of concern. The overall sentiment leans towards a positive outlook, thanks to the strategic moves and financial discipline.Highlights
Significant Investments and Strategic Transactions
U.S. Cellular and TDS made significant investments in 5G mid-band deployment and fiber expansion. The company announced a series of transactions, including the sale of its wireless business to T-Mobile and Spectrum transactions with Verizon and AT&T, which are expected to deliver substantial proceeds.
Financial Discipline and Improved Cash Flow
Capital expenditures were down 24% for the full year, contributing to an increase in free cash flow. U.S. Cellular paid down over $200 million in debt and maintained a strong balance sheet.
Fiber Expansion and Revenue Growth
TDS Telecom increased fiber service addresses by 129,000 in 2024 and residential revenues grew by 6%. The company set new long-term fiber goals, targeting 1.8 million marketable fiber service addresses.
Positive Financial Performance
Adjusted EBITDA increased 7% on a consolidated basis, and U.S. Cellular ranked first in the North Central region in JD Power's 2025 U.S. Wireless Network Quality Performance Study.
Lowlights
Decline in Service Revenues
U.S. Cellular's service revenues declined 2% in the fourth quarter, driven by declines in the average retail subscriber base.
Negative Net Retail Subscriber Adds
Despite improvements in subscriber results, net retail subscriber adds were still negative, highlighting challenges in the competitive environment.
Pressure on TDS Telecom Adjusted EBITDA
Investments in sales and marketing, internal construction crews, and transformation initiatives are putting pressure on TDS Telecom's adjusted EBITDA for 2025.
Company Guidance
During the fourth quarter 2024 conference call for Telephone and Data Systems, Inc. and U.S. Cellular, significant guidance and financial metrics were disclosed. The company reported a 24% decrease in capital expenditures, which contributed to an increase in free cash flow for the year. Adjusted EBITDA rose by 7% on a consolidated basis, reflecting rigorous cost reduction efforts and expanded margins. U.S. Cellular paid down over $200 million in debt, achieving a bank leverage ratio below three times in the second half of the year. The sale of OneNeck IT Solutions and several small copper ILECs and cable companies were highlighted as strategic moves to optimize the portfolio. Looking forward to 2025, the company aims to close the T-Mobile and other Spectrum transactions, focus on enhancing the success of U.S. Cellular's owned towers, increase capital spend on fiber opportunities, and maintain a strong corporate culture. U.S. Cellular anticipates substantial proceeds from the T-Mobile transaction, with a mid-2025 closing expected, while TDS Telecom plans to deliver 150,000 fiber service addresses, increasing capital expenditures to between $375 million and $425 million. The company did not issue financial guidance for U.S. Cellular for 2025 due to pending regulatory approvals and transaction closures.Telephone & Data Systems Corporate Events
Executive/Board ChangesBusiness Operations and Strategy
TDS Announces Leadership Transition for Strategic Growth
Positive
Jan 27, 2025
On January 27, 2025, TDS announced that effective February 1, 2025, Walter C. D. Carlson will assume the roles of President and CEO, succeeding LeRoy T. Carlson Jr., who will become Vice Chair focusing on enterprise strategy. This leadership transition highlights the company’s commitment to strategic growth and continuity, with Christopher D. O’Leary appointed as Lead Independent Director, ensuring a seamless executive succession that leverages the strengths of its founding family members and positions TDS for long-term success.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.